“There is a rapidly growing vanguard of business leaders who want to make a positive difference.”

Lynda Gratton, professor of management practice at London Business School

Image: Harry Borden

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Leadership perspectives of global CXOs

Kenny MacIver – October 2014

Lynda Gratton argues that business leadership is undergoing a profound transformation, with executives developing and applying new sets of skills, values and global outlooks.

“The very forces that are transforming corporations are also transforming what leadership is becoming. Some of the leadership capabilities we hold dear are beginning to be swept away and in their place are emerging ideas about what leadership can and should be.”

Lynda Gratton, professor of management practice at London Business School, is observing a major shift in how leaders are expected to lead — and in the expectations they set for themselves. Under the influence of eroded corporate trust, demands for greater transparency, growing citizen activism and antipathy for focusing on short-term financial goals, CXOs at some of the world’s largest companies are changing their behavior to reflect the interests of a new, wider set of stakeholders, she observes. Those stakeholders extend well beyond traditional investors and shareholders to embrace employees, the communities in which businesses operate, the workers across their supply chain, their customers and, indeed, society at large.

“New ideas about leadership are transforming our understanding of the roles that leaders play, the tasks they will need to undertake and the skills and competences they need to develop,” Gratton highlights in her new book The Key: How Corporations Succeed by Solving the World’s Toughest Problems. And that applies as much to the behavior of CIOs as any other leader in the C-suite.

“We are truly in the midst of a transition from an old order signalled by powerful leadership, supported by PR-speak and followed by employees prepared to engage in a ‘parent-child’ relationship,” she says. In its place, she’s seeing a new order where leaders demonstrate authenticity, where hierarchies are becoming dismantled and where those who follow are much more demanding of those who lead.Experience and valuesIn support of such goals, numerous companies with a genuine agenda for business responsibility encourage their leadership teams to engage with those at the ‘edge of the system.’ Their experiences with disadvantaged groups around the world often instil the authenticity and purpose behind the corporation’s social programs and permeate through the rest of the business.

A good example that Gratton likes to highlight is at the Danish pharmaceutical company Novo Nordisk, where executives in recent years have visited and supported cancer facilities for children in Rio Di Janeiro’s favelas and within economically deprived areas of Sub-Saharan Africa — experiences that have helped shaped its CXOs’ own value systems. Indeed, Novo Nordisk operates what it calls a ‘Triple Bottom Line’ — a business philosophy that maintains equal balance between financial, social and environmental responsibility.

“You can see how experience has fundamentally changed the way such executives think about the world,” says Gratton. “And, of course, those are the type of leaders who then go on to do amazing things.”

Closer to home, she highlights how leaders in the technology sector have been deeply involved and innovative in their approaches to tackling youth unemployment in different regions around the world, using technology to train young people and help ready them for the new wave of jobs that will emerge over the next decade.Characteristics of a new leaderLeaders, she argues, can no longer be bystanders in the world in which their organizations prosper. Whether building the inner resilience of the business, anchoring it in the community or addressing global challenges, they need to demonstrate some individual characteristics:

• support and role-model compassion

• set aspirational goals for others to follow

• make resource-allocation decisions that encompass a wider community of people

• reach out to an array of stakeholders.

“Such leaders are part of a rapidly growing vanguard of people who want to make a positive difference. It is beginning to look like good companies can both create an adequate return for shareholders and also have a wider social agenda,” she concludes, citing studies that clearly show the stock prices of corporations with a sustainability agenda outperform those without one.

• Lynda Gratton’s The Key: How Corporations Succeed by Solving the World’s Toughest Problems is out now.

Professor of management practice at London Business School, head of the Future of Work Research Consortium and best-selling business author, Lynda Gratton focuses on people-centric strategies for transforming companies.

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